Reconciliations of net income determined in accordance with U.S.
generally accepted accounting principles, or GAAP, to earnings
before interest, taxes, depreciation and amortization, or EBITDA,
and EBITDA as adjusted, or Adjusted EBITDA, and net income available
for common shareholders determined in accordance with GAAP to funds
from operations, or FFO, available for common shareholders, and
Normalized FFO available for common shareholders, for the three and
nine months ended September 30, 2017 and 2016 appear later in this
press release.

John Murray, President and Chief Operating Officer of HPT, made the
following statement regarding today's announcement:

“HPT continued its strategic growth this quarter, acquiring two full
service hotels and 14 extended stay hotels for $231.0 million and adding
them to HPT’s management agreements with InterContinental and Sonesta,
respectively. We also sold three Carlson hotels for an aggregate of
$24.6 million, resulting in a total gain on sale of $9.3 million.

While third quarter 2017 hotel RevPAR declined compared to last year,
coverage of our minimum returns and rents remained strong. In October,
we improved our balance sheet by issuing $400 million of 3.950% senior
unsecured notes due 2028 and redeeming $350 million of 6.70% senior
unsecured notes due 2018.”

Results for the Three and Nine Months Ended September 30, 2017 and
Recent Activities:

Net Income Available for Common Shareholders: Net income
available for common shareholders for the quarter ended September 30,
2017 was $85.7 million, or $0.52 per diluted share, compared to net
income available for common shareholders of $46.6 million, or $0.30
per diluted share, for the quarter ended September 30, 2016. Net
income available for common shareholders includes $0.9 million, or
$0.01 per diluted share, and $25.0 million, or $0.16 per diluted
share, of estimated business management incentive fee expense for the
quarters ended September 30, 2017 and 2016, respectively. Net income
available for common shareholders for the quarter ended September 30,
2017 also includes a $9.3 million, or $0.06 per diluted share, gain on
sale of real estate. The weighted average number of diluted common
shares outstanding was 164.2 million and 157.3 million for the
quarters ended September 30, 2017 and 2016, respectively.

Net
income available for common shareholders for the nine months ended
September 30, 2017 was $172.3 million, or $1.05 per diluted share,
compared to net income available for common shareholders of $144.4
million, or $0.94 per diluted share, for the nine months ended
September 30, 2016. Net income available for common shareholders
includes $38.2 million, or $0.23 per diluted share, and $56.3 million,
or $0.37 per diluted share, of estimated business management incentive
fee expense for the nine months ended September 30, 2017 and 2016,
respectively. Net income available for common shareholders for the
nine months ended September 30, 2017 also includes a $9.3 million, or
$0.06 per diluted share, gain on sale of real estate and was reduced
by $9.9 million, or $0.06 per diluted share, for the amount by which
the liquidation preference for HPT's 7.125% Series D cumulative
redeemable preferred shares that were redeemed during the period
exceeded the carrying value for those preferred shares as of the date
of redemption. The weighted average number of diluted common shares
outstanding was 164.2 million and 153.4 million for the nine months
ended September 30, 2017 and 2016, respectively.

Adjusted EBITDA: Adjusted EBITDA for the quarter ended
September 30, 2017 compared to the same period in 2016 increased 6.2%
to $223.5 million.

Adjusted EBITDA for the nine months
ended September 30, 2017 compared to the same period in 2016 increased
4.0% to $638.3 million.

Normalized FFO Available for Common Shareholders: Normalized
FFO available for common shareholders for the quarter ended
September 30, 2017 were $175.5 million, or $1.07 per diluted share,
compared to Normalized FFO available for common shareholders of $162.1
million, or $1.03 per diluted share, for the quarter ended
September 30, 2016.

Normalized FFO available for
common shareholders for the nine months ended September 30, 2017 were
$497.9 million, or $3.03 per diluted share, compared to Normalized FFO
available for common shareholders of $468.0 million, or $3.05 per
diluted share, for the nine months ended September 30, 2016.

Hotel RevPAR (comparable hotels): For the quarter ended
September 30, 2017 compared to the same period in 2016 for HPT’s 302
hotels that were owned continuously since July 1, 2016: average daily
rate, or ADR, decreased 0.2% to $126.94; occupancy decreased 0.2
percentage points to 79.9%; and revenue per available room, or RevPAR,
decreased 0.4% to $101.43.

For the nine months ended
September 30, 2017 compared to the same period in 2016 for HPT’s 299
hotels that were owned continuously since January 1, 2016: ADR
increased 0.6% to $126.59; occupancy decreased 0.3 percentage points
to 77.3%; and RevPAR increased 0.2% to $97.85.

Hotel RevPAR (all hotels): For the quarter ended September 30,
2017 compared to the same period in 2016 for HPT’s 323 hotels: ADR
decreased 0.1% to $128.27; occupancy decreased 0.8 percentage points
to 79.4%; and RevPAR decreased 1.1% to $101.85.

For the
nine months ended September 30, 2017 compared to the same period in
2016 for HPT’s 323 hotels: ADR increased 0.5% to $127.87; occupancy
decreased 0.5 percentage points to 76.9%; and RevPAR decreased 0.2% to
$98.33.

Coverage of Minimum Returns and Rents: For the quarter ended
September 30, 2017, the aggregate coverage ratio of (x) total hotel
revenues minus all hotel expenses and FF&E reserve escrows which are
not subordinated to minimum returns and minimum rent payments to HPT
to (y) HPT’s minimum returns and rents due from hotels decreased to
1.19x from 1.27x for the quarter ended September 30, 2016.

For
the nine months ended September 30, 2017, the aggregate coverage ratio
of (x) total hotel revenues minus all hotel expenses and FF&E reserve
escrows which are not subordinated to minimum returns and minimum rent
payments to HPT to (y) HPT’s minimum returns and rents due from hotels
decreased to 1.11x from 1.18x for the nine months ended September 30,
2016.

For the quarter ended September 30, 2017, the
aggregate coverage ratio of (x) total travel center revenues less
travel center expenses to (y) HPT’s minimum rent due from leased
travel centers decreased to 1.72x from 1.78x for the quarter ended
September 30, 2016.

For the nine months ended
September 30, 2017, the aggregate coverage ratio of (x) total travel
center revenues less travel center expenses to (y) HPT’s minimum rent
due from leased travel centers decreased to 1.51x from 1.59x for the
nine months ended September 30, 2016.

As of
September 30, 2017, approximately 78% of HPT’s aggregate annual
minimum returns and rents were secured by guarantees or security
deposits from HPT’s managers and tenants pursuant to the terms of
HPT’s operating agreements.

Also in August 2017, HPT acquired the 300
room Crowne Plaza Charlotte Executive Park hotel located in Charlotte,
NC for a purchase price of $43.9 million, excluding acquisition
related costs. HPT also added this hotel to its management agreement
with InterContinental.

In September 2017, HPT acquired 14
extended stay hotels with 1,653 suites located in 12 states for a
purchase price of $138.0 million, excluding acquisition related costs.
HPT rebranded these hotels to the Sonesta ES Suites® brand
and added them to its management agreement with Sonesta International
Hotels Corporation, or Sonesta.

Recent Property Disposition Activities: In August 2017, HPT
sold its 159 room Radisson hotel located in Chandler, AZ for a sale
price of $9.5 million, excluding closing costs.

Also in
August 2017, HPT sold its 143 room Country Inn & Suites hotel located
in Naperville, IL for a sale price of $6.6 million, excluding closing
costs.

In September 2017, HPT sold its 209 room Park Plaza
hotel located in Bloomington, MN for a sale price of $8.5 million,
excluding closing costs.

As previously disclosed, the net
proceeds from the sales of these three hotels, which were operated
under HPT's agreement with Carlson Hotels Worldwide, or Carlson, will
be used to partially fund certain renovations to the remaining hotels
operated under HPT's agreement with Carlson.

Financing Activities: In October 2017, HPT issued $400.0
million principal amount of 3.950% senior notes due 2028 in an
underwritten public offering. The proceeds from this offering of
$388.2 million after discounts and offering expenses were used to
repay amounts outstanding under HPT's revolving credit facility and
for general business purposes.

Also in October 2017, HPT
redeemed at par plus accrued interest all $350.0 million of its 6.70%
senior notes due 2018.

Tenants and Managers: As of September 30, 2017, HPT had
nine operating agreements with seven hotel operating companies for 323
hotels with 49,948 rooms, which represented 66% of HPT’s total annual
minimum returns and rents, and five lease agreements with one travel
center operating company for 199 travel centers, which represented 34%
of HPT’s total annual minimum returns and rents.

Marriott Agreements: As of September 30, 2017, 122 of HPT’s
hotels were operated by subsidiaries of Marriott International, Inc.
(Nasdaq: MAR), or Marriott, under three agreements. HPT’s Marriott No.
1 agreement includes 53 hotels, and provides for annual minimum return
payments to HPT of $69.1 million as of September 30, 2017
(approximately $17.3 million per quarter). During the three months
ended September 30, 2017, HPT realized returns under its Marriott No.
1 agreement of $20.9 million, of which $3.6 million represents HPT's
share of hotel cash flows in excess of the minimum returns due to HPT
for the period. Because there is no guarantee or security deposit for
this agreement, the minimum returns HPT receives under this agreement
are limited to available hotel cash flows after payment of operating
expenses and funding of a FF&E reserve. HPT’s Marriott No. 234
agreement includes 68 hotels and requires annual minimum returns to
HPT of $106.5 million as of September 30, 2017 (approximately $26.6
million per quarter). During the three months ended September 30,
2017, HPT realized returns under its Marriott No. 234 agreement of
$26.6 million. HPT’s Marriott No. 234 agreement is partially secured
by a security deposit and a limited guarantee from Marriott; during
the three months ended September 30, 2017, the available security
deposit was replenished by $4.1 million from a share of hotel cash
flows in excess of the minimum returns due to HPT for the period. At
September 30, 2017, the available security deposit from Marriott for
the Marriott No. 234 agreement was $26.5 million and there was $30.7
million remaining under Marriott’s guaranty for up to 90% of the
minimum returns due to HPT to cover future payment shortfalls if and
after the available security deposit is depleted. HPT's Marriott No. 5
agreement includes one resort hotel in Kauai, HI which is leased to
Marriott on a full recourse basis. The contractual rent due to HPT for
this hotel for the three months ended September 30, 2017 of $2.5
million was paid to HPT.

InterContinental Agreement: As of September 30, 2017, 99 of
HPT’s hotels were operated by subsidiaries of InterContinental under
one agreement requiring annual minimum returns and rents to HPT of
$188.9 million (approximately $47.2 million per quarter). During the
three months ended September 30, 2017, HPT realized returns and rents
under its InterContinental agreement of $54.7 million, of which $8.3
million represents HPT's share of hotel cash flows in excess of the
minimum returns due to HPT for the period. HPT’s InterContinental
agreement is partially secured by a security deposit. During the three
months ended September 30, 2017, the available security deposit was
replenished by $1.7 million from a share of hotel cash flows in excess
of the minimum returns due to HPT for the period. At September 30,
2017, the available InterContinental security deposit which HPT held
to pay future payment shortfalls was at the contractually capped
amount of $100.0 million.

Wyndham Agreement: As of September 30, 2017, 22 of HPT’s hotels
were operated under a management agreement with a subsidiary of
Wyndham Worldwide Corporation (NYSE: WYN), or Wyndham, requiring
annual minimum returns of $27.4 million as of September 30, 2017
(approximately $6.9 million per quarter). HPT also leases 48 vacation
units in one of the hotels to Wyndham Vacation Resorts, Inc., a
subsidiary of Wyndham, which requires annual minimum rent of $1.4
million (approximately $0.4 million per quarter). The guarantee
provided by Wyndham with respect to the lease is unlimited. The
guarantee provided by Wyndham with respect to the management agreement
is limited to $35.7 million. During the nine months ended
September 30, 2017, the hotels under this agreement generated cash
flows that were less than the minimum returns due to HPT and this
guaranty was depleted. As of November 7, 2017, all amounts due to HPT
under the management agreement and the lease have been paid to HPT.

Morgans Agreement: As of September 30, 2017, HPT leases one
hotel to a subsidiary of Morgans Hotel Group Co., or Morgans,
requiring annual minimum rent to HPT of $7.6 million as of
September 30, 2017 (approximately $1.9 million per quarter). In
December 2016, HPT advised Morgans that the closing of its merger with
SBE Entertainment Group, LLC, or SBE, without HPT's consent was in
violation of the Morgans agreement, and HPT filed an action in
California for unlawful detainer against Morgans and SBE. HPT is in
discussions with Morgans and SBE regarding this matter and is pursuing
remedies, which may include terminating the Morgans agreement. As of
November 7, 2017, all scheduled rent payments due to HPT under the
lease have been paid.

Other Hotel Agreements: As of September 30, 2017, HPT’s
remaining 79 hotels were operated under three agreements: one
management agreement with Sonesta (49 hotels), requiring annual
minimum returns of $109.0 million as of September 30, 2017
(approximately $27.3 million per quarter); one management agreement
with a subsidiary of Hyatt Hotels Corporation (NYSE: H), or Hyatt (22
hotels), requiring annual minimum returns of $22.0 million as of
September 30, 2017 (approximately $5.5 million per quarter); and one
management agreement with a subsidiary of Carlson (8 hotels),
requiring annual minimum returns of $12.9 million as of September 30,
2017 (approximately $3.2 million per quarter). Minimum returns due to
HPT are partially guaranteed under the Hyatt and Carlson agreements.
There is no guarantee or security deposit for the Sonesta agreement
and the minimum returns HPT receives under that agreement are limited
to available hotel cash flows after payment of operating expenses. The
payments due to HPT under these agreements for the three months ended
September 30, 2017 were paid to HPT.

Travel Center Agreements: As of September 30, 2017, HPT’s 199
travel centers located along the U.S. Interstate Highway system were
leased to TravelCenters of America LLC (Nasdaq: TA), or TA, under five
lease agreements, which require aggregate annual minimum rents of
$282.5 million (approximately $70.6 million per quarter). As of
September 30, 2017, all payments due to HPT from TA under these leases
were current.

Conference Call:

On Wednesday, November 8, 2017, at 10:00 a.m. Eastern Time, John Murray,
President and Chief Operating Officer, and Mark Kleifges, Chief
Financial Officer and Treasurer, will host a conference call to discuss
HPT's third quarter 2017 financial results. The conference call
telephone number is (877) 329-3720. Participants calling from outside
the United States and Canada should dial (412) 317-5434. No pass code is
necessary to access the call from either number. Participants should
dial in about 15 minutes prior to the scheduled start of the call. A
replay of the conference call will be available through Wednesday,
November 15, 2017. To hear the replay, dial (412) 317-0088. The replay
pass code is 10113391.

A live audio webcast of the conference call will also be available in a
listen only mode on HPT’s website, which is located at www.hptreit.com.
Participants wanting to access the webcast should visit HPT’s website
about five minutes before the call. The archived webcast will be
available for replay on HPT’s website for about one week after the call.
The transcription, recording and retransmission in any way of HPT’s
third quarter conference call is strictly prohibited without the prior
written consent of HPT.

Supplemental Data:

A copy of HPT’s Third Quarter 2017 Supplemental Operating and Financial
Data is available for download at HPT’s website, www.hptreit.com.
HPT’s website is not incorporated as part of this press release.

Hospitality Properties Trust is a real estate investment trust, or REIT,
which owns a diverse portfolio of hotels and travel centers located in
45 states, Puerto Rico and Canada. HPT’s properties are operated under
long term management or lease agreements. HPT is managed by the
operating subsidiary of The RMR Group Inc. (Nasdaq: RMR), an alternative
asset management company that is headquartered in Newton, Massachusetts.

Please see the following pages for a more detailed statement of HPT’s
operating results and financial condition and for an explanation of
HPT’s calculation of FFO available for common shareholders and
Normalized FFO available for common shareholders, EBITDA and Adjusted
EBITDA and a reconciliation of those amounts to amounts determined
according to GAAP.

WARNING CONCERNING FORWARD LOOKING STATEMENTS

THIS PRESS RELEASE CONTAINS STATEMENTS THAT CONSTITUTE FORWARD LOOKING
STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995 AND OTHER SECURITIES LAWS. ALSO, WHENEVER HPT USES
WORDS SUCH AS “BELIEVE”, “EXPECT”, “ANTICIPATE”, “INTEND”, “PLAN”,
“ESTIMATE”, "WILL", “MAY” AND NEGATIVES OR DERIVATIVES OF THESE OR
SIMILAR EXPRESSIONS, HPT IS MAKING FORWARD LOOKING STATEMENTS. THESE
FORWARD LOOKING STATEMENTS ARE BASED UPON HPT’S PRESENT INTENT, BELIEFS
OR EXPECTATIONS, BUT FORWARD LOOKING STATEMENTS ARE NOT GUARANTEED TO
OCCUR AND MAY NOT OCCUR. ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE
CONTAINED IN OR IMPLIED BY HPT’S FORWARD LOOKING STATEMENTS AS A RESULT
OF VARIOUS FACTORS. FOR EXAMPLE:

AS OF SEPTEMBER 30, 2017, APPROXIMATELY 78% OF HPT’S AGGREGATE ANNUAL
MINIMUM RETURNS AND RENTS WERE SECURED BY GUARANTEES OR SECURITY
DEPOSITS FROM HPT’S MANAGERS AND TENANTS. THIS MAY IMPLY THAT THESE
MINIMUM RETURNS AND RENTS WILL BE PAID. IN FACT, CERTAIN OF THESE
GUARANTEES AND SECURITY DEPOSITS ARE LIMITED IN AMOUNT AND DURATION
AND ALL THE GUARANTEES ARE SUBJECT TO THE GUARANTORS’ ABILITY AND
WILLINGNESS TO PAY. FURTHER, WYNDHAM'S GUARANTEE OF THE MINIMUM
RETURNS DUE FROM HPT'S HOTELS THAT ARE MANAGED BY WYNDHAM WAS DEPLETED
AS OF SEPTEMBER 30, 2017. HPT DOES NOT KNOW WHETHER WYNDHAM WILL
CONTINUE TO PAY THE MINIMUM RETURNS DUE TO HPT DESPITE THE DEPLETED
GUARANTEE OR IF WYNDHAM WILL DEFAULT ON ITS PAYMENTS. THE BALANCE OF
HPT’S ANNUAL MINIMUM RETURNS AND RENTS AS OF SEPTEMBER 30, 2017 WAS
NOT GUARANTEED NOR DOES HPT HOLD A SECURITY DEPOSIT WITH RESPECT TO
THOSE AMOUNTS. HPT CANNOT BE SURE OF THE FUTURE FINANCIAL PERFORMANCE
OF HPT’S PROPERTIES AND WHETHER SUCH PERFORMANCE WILL COVER HPT’S
MINIMUM RETURNS AND RENTS, WHETHER THE GUARANTEES OR SECURITY DEPOSITS
WILL BE ADEQUATE TO COVER FUTURE SHORTFALLS IN THE MINIMUM RETURNS OR
RENTS DUE TO HPT WHICH THEY GUARANTY OR SECURE, OR REGARDING HPT’S
MANAGERS’, TENANTS’ OR GUARANTORS’ FUTURE ACTIONS IF AND WHEN THE
GUARANTEES AND SECURITY DEPOSITS EXPIRE OR ARE DEPLETED OR THEIR
ABILITY OR WILLINGNESS TO PAY MINIMUM RETURNS AND RENTS OWED TO HPT.
MOREOVER, THE SECURITY DEPOSITS HELD BY HPT ARE NOT SEGREGATED FROM
HPT’S OTHER ASSETS AND THE APPLICATION OF SECURITY DEPOSITS TO COVER
PAYMENT SHORTFALLS WILL RESULT IN HPT RECORDING INCOME, BUT WILL NOT
RESULT IN HPT RECEIVING ADDITIONAL CASH,

HPT HAS ADVISED MORGANS THAT THE CLOSING OF ITS MERGER WITH SBE WAS IN
VIOLATION OF HPT'S AGREEMENT WITH MORGANS, HPT HAS FILED AN ACTION FOR
UNLAWFUL DETAINER AGAINST MORGANS AND SBE TO COMPEL MORGANS AND SBE TO
SURRENDER POSSESSION OF THE SAN FRANCISCO HOTEL WHICH MORGANS
HISTORICALLY LEASED FROM HPT, AND HPT IS IN DISCUSSIONS WITH MORGANS
AND SBE REGARDING THIS MATTER. THE OUTCOME OF THIS PENDING LITIGATION
AND OF THESE DISCUSSIONS WITH MORGANS AND SBE IS NOT ASSURED, BUT HPT
BELIEVES MORGANS MAY SURRENDER POSSESSION OF THIS HOTEL OR THAT THE
COURT WILL DETERMINE THAT MORGANS AND SBE HAVE BREACHED THE HISTORICAL
LEASE. HPT ALSO BELIEVES THAT THIS HOTEL MAY REQUIRE SUBSTANTIAL
CAPITAL INVESTMENT TO REMAIN COMPETITIVE IN ITS MARKET. THE
CONTINUATION OF THIS DISPUTE WITH MORGANS AND SBE REQUIRES HPT TO
EXPEND LEGAL FEES AND HPT BELIEVES THE RESULT OF THIS DISPUTE MAY
CAUSE SOME LOSS OF RENT AT LEAST UNTIL THIS HOTEL MAY BE RENOVATED AND
OPERATIONS IMPROVE. LITIGATION AND DISPUTES WITH TENANTS OFTEN PRODUCE
UNEXPECTED RESULTS AND HPT CAN PROVIDE NO ASSURANCE REGARDING THE
RESULTS OF THIS DISPUTE,

MR. MURRAY NOTES IN THIS PRESS RELEASE THAT HPT HAS GROWN ITS HOTEL
PORTFOLIO DURING THE THIRD QUARTER OF 2017. HPT'S ABILITY TO ACQUIRE
NEW PROPERTIES DEPENDS IN LARGE PART UPON ITS ABILITY TO BUY
PROPERTIES THAT GENERATE RETURNS OR CAN BE LEASED FOR RENTS WHICH
EXCEED ITS OPERATING AND CAPITAL COSTS. HPT MAY BE UNABLE TO IDENTIFY
PROPERTIES THAT IT WANTS TO ACQUIRE OR NEGOTIATE ACCEPTABLE PURCHASE
PRICES, ACQUISITION FINANCING, MANAGEMENT CONTRACTS OR LEASE TERMS FOR
NEW PROPERTIES, AND ACQUISITIONS IT MAY MAKE MAY NOT BE BENEFICIAL TO
IT, AND

MR. MURRAY NOTES IN THIS PRESS RELEASE THAT HPT'S HOTEL REVPAR
DECLINED DURING THE THIRD QUARTER OF 2017 BUT THAT COVERAGE OF HPT'S
MINIMUM RETURNS AND RENTS REMAINED STRONG. COVERAGE OF HPT'S MINIMUM
RETURNS AND RENTS MAY DECLINE IN FUTURE PERIODS IF REVPAR AT HPT’S
HOTELS CONTINUES TO DECLINE OR DOES NOT IMPROVE OR FOR OTHER REASONS.

THE INFORMATION CONTAINED IN HPT’S FILINGS WITH THE SECURITIES AND
EXCHANGE COMMISSION, OR SEC, INCLUDING UNDER THE CAPTION “RISK FACTORS”
IN HPT’S PERIODIC REPORTS, OR INCORPORATED THEREIN, IDENTIFIES OTHER
IMPORTANT FACTORS THAT COULD CAUSE DIFFERENCES FROM HPT’S FORWARD
LOOKING STATEMENTS. HPT’S FILINGS WITH THE SEC ARE AVAILABLE ON THE
SEC’S WEBSITE AT WWW.SEC.GOV.

YOU SHOULD NOT PLACE UNDUE RELIANCE UPON FORWARD LOOKING STATEMENTS.

EXCEPT AS REQUIRED BY LAW, HPT DOES NOT INTEND TO UPDATE OR CHANGE ANY
FORWARD LOOKING STATEMENTS AS A RESULT OF NEW INFORMATION, FUTURE EVENTS
OR OTHERWISE.

HOSPITALITY PROPERTIES TRUST

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(amounts in thousands, except share data)

(Unaudited)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2017

2016

2017

2016

Revenues:

Hotel operating revenues (1)

$

495,550

$

464,981

$

1,392,995

$

1,334,656

Rental income (2)

80,896

77,470

240,274

229,760

FF&E reserve income (3)

1,142

1,065

3,524

3,517

Total revenues

577,588

543,516

1,636,793

1,567,933

Expenses:

Hotel operating expenses (1)

343,274

322,012

965,546

923,239

Depreciation and amortization

98,205

90,139

286,811

266,192

General and administrative (4)

13,404

37,739

76,097

91,127

Acquisition related costs (5)

—

156

—

885

Total expenses

454,883

450,046

1,328,454

1,281,443

Operating income

122,705

93,470

308,339

286,490

Dividend income

626

626

1,878

1,375

Interest income

211

89

590

227

Interest expense (including amortization of debt issuance costs and
debt discounts and premiums of $2,194 and $2,122 and $6,541 and
$6,114, respectively)

(46,574

)

(41,280

)

(135,329

)

(124,564

)

Loss on early extinguishment of debt (6)

—

(158

)

—

(228

)

Income before income taxes, equity in earnings of an investee and
gain on sale of real estate

(1) At September 30, 2017, HPT owned 323 hotels; 320 of these hotels
were managed by hotel operating companies and three hotels were leased
to hotel operating companies. At September 30, 2017, HPT also owned 199
travel centers; all 199 of these travel centers were leased to a travel
center operating company under five lease agreements. HPT’s condensed
consolidated statements of income include hotel operating revenues and
expenses of managed hotels and rental income from its leased hotels and
travel centers. The net operating results of HPT's managed hotel
portfolios exceeded, in the aggregate, the minimum returns due to HPT in
both the three months ended September 30, 2017 and 2016. Certain of
HPT's managed hotels had net operating results that were, in the
aggregate, $5,699 and $2,248 less than the minimum returns due to HPT in
the three months ended September 30, 2017 and 2016, respectively, and
$18,971 and $12,618 less than the minimum returns due to HPT in the nine
months ended September 30, 2017 and 2016, respectively. When the
managers of these hotels fund the shortfalls under the terms of HPT’s
operating agreements or their guarantees, HPT reflects such fundings
(including security deposit applications) in its condensed consolidated
statements of income as a reduction of hotel operating expenses. There
was no reduction to hotel operating expenses in the three months ended
September 30, 2017 or 2016 and reductions of $2,689 and $592 in the nine
months ended September 30, 2017 and 2016, respectively, as a result of
such fundings. HPT had shortfalls at certain of its managed hotel
portfolios not funded by the managers of these hotels under the terms of
its operating agreements of $5,699 and $2,248 in the three months ended
September 30, 2017 and 2016, respectively, and $16,282 and $12,026 in
the nine months ended September 30, 2017 and 2016, respectively, which
represent the unguaranteed portions of HPT's minimum returns from
Sonesta. Certain of HPT’s managed hotel portfolios had net operating
results that were, in the aggregate, $31,355 and $35,123 more than the
minimum returns due to HPT in the three months ended September 30, 2017
and 2016, respectively, and $67,052 and $80,867 more than the minimum
returns due to HPT in the nine months ended September 30, 2017 and 2016,
respectively. Certain guarantees to HPT and security deposits held by
HPT may be replenished by a share of these excess cash flows from the
applicable hotel operations pursuant to the terms of the respective
operating agreements or the guarantees. When these guarantees and
security deposits are replenished by cash flows from hotel operations,
HPT reflects such replenishments in its condensed consolidated
statements of income as an increase to hotel operating expenses. Hotel
operating expenses were increased by $10,099 and $15,103 in the three
months ended September 30, 2017 and 2016, respectively, and $26,319 and
$33,897 in the nine months ended September 30, 2017 and 2016,
respectively, as a result of such replenishments.

(2) Rental income includes $3,087 and $2,932 in the three months ended
September 30, 2017 and 2016, respectively, and $9,208 and $10,377 in the
nine months ended September 30, 2017 and 2016, respectively, of
adjustments necessary to record scheduled rent increases under certain
of HPT’s leases, the deferred rent obligations under HPT’s travel center
leases and the estimated future payments to HPT under its travel center
leases for the cost of removing underground storage tanks on a straight
line basis.

(3) Various percentages of total sales at certain of HPT’s hotels are
escrowed as reserves for future renovations or refurbishment, or FF&E
reserve escrows. HPT owns all the FF&E reserve escrows for its hotels.
HPT reports deposits by its tenants into the escrow accounts under its
hotel leases as FF&E reserve income. HPT does not report the amounts
which are escrowed as FF&E reserves for its managed hotels as FF&E
reserve income.

(4) Incentive fees under HPT’s business management agreement are payable
after the end of each calendar year, are calculated based on common
share total return, as defined, and are included in general and
administrative expense in HPT’s condensed consolidated statements of
income. In calculating net income in accordance with GAAP, HPT
recognizes estimated business management incentive fee expense, if any,
in the first, second and third quarters. Although HPT recognizes this
expense, if any, in the first, second and third quarters for purposes of
calculating net income, HPT does not include these amounts in the
calculation of Normalized FFO available for common shareholders or
Adjusted EBITDA until the fourth quarter, which is when the business
management incentive fee expense amount for the year, if any, is
determined. Net income includes $873 and $25,036 of estimated business
management incentive fee expense in the three months ended September 30,
2017 and 2016, respectively, and $38,243 and $56,272 of estimated
business management incentive fee expense in the nine months ended
September 30, 2017 and 2016, respectively.

(5) Represents costs associated with HPT’s acquisition activities.
Acquisition costs incurred during the 2017 periods have been capitalized
in purchase accounting pursuant to a change in GAAP.

(6) HPT recorded losses of $158 and $228 on early extinguishment of debt
during the three and nine months ended September 30, 2016, respectively,
in connection with the redemption of certain senior unsecured notes.

(7) HPT recorded a $9,348 gain on sale of real estate during the three
months ended September 30, 2017 in connection with the sale of three
hotels.

(8) In February 2017, HPT redeemed all 11,600,000 of its outstanding
7.125% Series D cumulative redeemable preferred shares at the stated
liquidation preference of $25.00 per share plus accrued and unpaid
distributions to the date of redemption (an aggregate of $291,435). The
liquidation preference of the redeemed shares exceeded the carrying
amount for the redeemed shares as of the date of redemption by $9,893,
or $0.06 per share, and HPT reduced net income available to common
shareholders in the nine months ended September 30, 2017 by that excess
amount.

(9) HPT calculates FFO available for common shareholders and Normalized
FFO available for common shareholders as shown above. FFO available for
common shareholders is calculated on the basis defined by The National
Association of Real Estate Investment Trusts, or NAREIT, which is net
income available for common shareholders calculated in accordance with
GAAP, excluding any gain or loss on sale of properties and loss on
impairment of real estate assets, if any, plus real estate depreciation
and amortization, as well as certain other adjustments currently not
applicable to HPT. HPT’s calculation of Normalized FFO available for
common shareholders differs from NAREIT’s definition of FFO available
for common shareholders because HPT includes business management
incentive fees, if any, only in the fourth quarter versus the quarter
when they are recognized as expense in accordance with GAAP due to their
quarterly volatility not necessarily being indicative of HPT’s core
operating performance and the uncertainty as to whether any such
business management incentive fees will be payable when all
contingencies for determining such fees are known at the end of the
calendar year, and HPT excludes the excess of liquidation preference
over carrying value of preferred shares redeemed, acquisition related
costs expensed under GAAP and loss on early extinguishment of debt. HPT
considers FFO available for common shareholders and Normalized FFO
available for common shareholders to be appropriate supplemental
measures of operating performance for a REIT, along with net income, net
income available for common shareholders and operating income. HPT
believes that FFO available for common shareholders and Normalized FFO
available for common shareholders provide useful information to
investors because by excluding the effects of certain historical
amounts, such as depreciation expense, FFO available for common
shareholders and Normalized FFO available for common shareholders may
facilitate a comparison of HPT’s operating performance between periods
and with other REITs. FFO available for common shareholders and
Normalized FFO available for common shareholders are among the factors
considered by HPT’s Board of Trustees when determining the amount of
distributions to shareholders. Other factors include, but are not
limited to, requirements to maintain HPT’s qualification for taxation as
a REIT, limitations in its credit agreement and public debt covenants,
the availability to HPT of debt and equity capital, HPT’s expectation of
its future capital requirements and operating performance and HPT’s
expected needs for and availability of cash to pay its obligations. FFO
available for common shareholders and Normalized FFO available for
common shareholders do not represent cash generated by operating
activities in accordance with GAAP and should not be considered
alternatives to net income, net income available for common shareholders
or operating income as indicators of HPT’s operating performance or as
measures of HPT’s liquidity. These measures should be considered in
conjunction with net income, net income available for common
shareholders and operating income as presented in HPT’s condensed
consolidated statements of income. Other real estate companies and REITs
may calculate FFO available for common shareholders and Normalized FFO
available for common shareholders differently than HPT does.

(10) HPT calculates EBITDA and Adjusted EBITDA as shown above. HPT
considers EBITDA and Adjusted EBITDA to be appropriate supplemental
measures of its operating performance, along with net income, net income
available for common shareholders and operating income. HPT believes
that EBITDA and Adjusted EBITDA provide useful information to investors
because by excluding the effects of certain historical amounts, such as
interest, depreciation and amortization expense, EBITDA and Adjusted
EBITDA may facilitate a comparison of current operating performance with
HPT’s past operating performance. In calculating Adjusted EBITDA, HPT
includes business management incentive fees only in the fourth quarter
versus the quarter when they are recognized as expense in accordance
with GAAP due to their quarterly volatility not necessarily being
indicative of HPT’s core operating performance and the uncertainty as to
whether any such business management incentive fees will be payable when
all contingencies for determining such fees are known at the end of the
calendar year. EBITDA and Adjusted EBITDA do not represent cash
generated by operating activities in accordance with GAAP and should not
be considered alternatives to net income, net income available for
common shareholders or operating income as indicators of operating
performance or as measures of HPT’s liquidity. These measures should be
considered in conjunction with net income, net income available for
common shareholders and operating income as presented in HPT’s condensed
consolidated statements of income. Other real estate companies and REITs
may calculate EBITDA and Adjusted EBITDA differently than HPT does.

(11) Amounts represent the equity compensation for HPT’s trustees, its
officers and certain other employees of HPT’s manager.

A Maryland Real Estate Investment Trust with transferable shares of
beneficial interest listed on the Nasdaq.No shareholder,
Trustee or officer is personally liable for any act or obligation of the
Trust.